Nokia’s shares have climbed roughly 15% in a week, driven by growing confidence in its role in the expanding AI infrastructure market. The company’s flagship AI networking platform, Nokia AI-RAN, has become central to the story. The immediate catalyst was a record €2.8 billion in AI and cloud orders during the second quarter, more than double the level recorded a year earlier. Yet the rally raises a central question: how much of this demand will become revenue, and how quickly?
Nokia’s management estimates that about half of those orders could convert into sales within 12 months. That would imply approximately €1.4 billion in near term revenue, a figure that would far exceed the company’s €446 million in AI and cloud revenue during the second quarter. AI-RAN is designed to support AI-native radio access networks across 5G and 5G-Advanced, while Nokia’s broader AI and analytics portfolio targets network automation, security, service management, and operational efficiency.
The optimism is unfolding alongside a major retreat from China. Nokia plans to close its radio technology research and development center in Hangzhou by the end of the year, affecting roughly 1,600 positions. The move suggests a sharper strategic focus on markets with stronger growth prospects, but it also highlights the difficult restructuring required to reposition the business. On the same day, five senior managers bought Nokia shares at €9.0910, offering a visible sign of confidence in the company’s new direction and its AI-RAN strategy.
Still, the conversion challenge cannot be ignored. Nokia reported negative free cash flow in the second quarter and expects substantial restructuring costs, including cash outflows of as much as €800 million in 2026. At a price to earnings multiple above 70, the stock already reflects ambitious expectations. The coming quarters will show whether Nokia can turn its AI and cloud order backlog into profitable growth through platforms such as Nokia AI-RAN, or whether the rally has advanced faster than the underlying business.
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